How To Invest
In addition, Pat thinks then beginner investors should cultivate two important qualities: a healthy sense of skepticism and patience.
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Investors should approach all investments with a healthy sense of skepticism. This can help keep you out of fraudulent stocks that masquerade as high-quality stocks. It will also keep you out of legally operated, but poorly managed, companies that promise more than they can possibly deliver.
If you are a new investor, you should also realize that losing patience can cause you to sell your best choices right before a big rise. All too often, investors buy a promising stock just as it enters a period of price stagnation. Even the best-performing stocks run into these unpredictable phases from time to time. They move mainly sideways in a wide range for months or years before their next big rise begins. (Stock brokers often refer to these stocks as “dead money.”)
If you lack patience, you run a big risk of selling your best choices in the midst of one of these phases, prior to the next big move upward. If you lose patience and sell, you are particularly likely to do so in the low end of the trading range, when stock prices have weakened and confidence in the stock has waned.
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How To Invest Library Archives
BELL ALIANT INC. $26.87 (Toronto symbol BA; Shares outstanding: 227.8 million; Market cap: $6.1 billion; TSINetwork Rating: Average; Dividend yield: 7.1%; www.aliant.ca) sells phone and Internet services to 2.5 million customers in Atlantic Canada and rural Ontario and Quebec....
H&R REIT $22.10 (Toronto symbol HR.UN; Units outstanding: 270.3 million; Market cap: $6.0 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.1%; www.hr-reit.com) reported revenue of $314.6 million in the three months ended December 31, 2013. That was up 45.2% from $216.6 million a year earlier....
MANITOBA TELECOM $30.48 (Toronto symbol MBT; Shares outstanding: 77.1 million; Market cap: $2.3 billion; TSINetwork Rating: Average; Dividend yield: 5.6%; www.mts.ca) earned $0.23 a share in the three months ended December 31, 2013, down 47.7% from $0.44 a year earlier.
Revenue declined 1.1%, to $408.5 million from $413.1 million....
Revenue declined 1.1%, to $408.5 million from $413.1 million....
IBM $187.14 (New York symbol IBM; Shares outstanding: 1.0 billion; Market cap: $194.2 billion; TSINetwork Rating: Above Average; Dividend yield: 2.0%; www.ibm.com) is selling its low-end server operations to China’s Lenovo Group, the same company that acquired IBM’s personal computer division in 2005....
Here’s a good general rule to follow when choosing investments: Simple is better. The easier an investment is to explain and understand, the less likely it is to harbour hidden risks and costs that can only work against you. As the old investor saying goes, “Stick with plain vanilla.” For the investment industry, the rule works in reverse: The more complicated, the better. Each new feature provides a profit opportunity for the institution that sponsors the investment. It’s particularly important to keep this in mind with exchange-traded funds (ETFs). These investments are highly efficient mutual funds. Fees are low because investors don’t pay for management. Instead, ETFs aim to mimic the performance of a market index, by holding the same securities in the same proportions used to calculate the market index. As a liquidity feature, ETFs generally sell newly created units whenever their unit prices develop a premium over the value of the stocks they hold. They buy back units (in large blocks only, to keep costs low) when the unit price gets too far below the value of their holdings....
iShares Silver Bullion ETF, $12.27, symbol SVR on Toronto (Units outstanding: 5.0 million; Market cap: $61.4 million; ca.ishares.com), is an example of an ETF with the kinds of “bells & whistles” mentioned above. iShares Silver Bullion ETF aims to replicate the performance of the price of silver bullion, less the fund’s fees and expenses. Unlike stocks, commodity investments like silver bullion do not generate income. Instead, they come with a continuing cash drain for management, insurance and so on....
Vermilion Energy, $63.40, symbol VET on Toronto (Shares outstanding: 101.9 million; Market cap: $6.5 billion; www.vermilionenergy.com), produces oil and gas in Western Canada, Europe and Australia. It also holds an 18.5% interest in the Corrib gas field in Ireland. Vermilion’s current output is weighted 69% to oil and 31% to gas. In the three months ended September 30, 2013, the company’s production rose 13.6%, to 41,510 barrels of oil equivalent a day (including gas) from 36,546 a year ago. Cash flow per share gained 17.3%, to $1.63 from $1.39. In November 2013, Vermilion agreed to buy a 25% interest in four producing natural gas fields in northwest Germany, plus an exploration licence on the surrounding lands, for $170 million....
Patient Home Monitoring, $0.26, symbol PHM on Toronto (Shares outstanding: 105.7 million; Market cap: $28.0 million; www.phmhometesting.com), plans to keep acquiring small firms that serve chronically ill patients in their homes. It then aims to increase its revenue per patient by offering all these companies’ services to its growing client base. In the three months ended December 31, 2013, the company’s revenue jumped to $2.4 million from $1.0 million a year earlier. It earned $140,294, or $0.0014 a share, compared to $140,120, or $0.0022, on fewer shares outstanding. Patient Home Monitoring holds cash of $8.5 million, or $0.08 a share, and has low debt. The aging population and rising incidence of chronic disease are expanding the company’s market. At the same time, the increasing cost of caring for patients in hospitals is leading to a push for more in-home care. However, Patient Home Monitoring’s growth-by-acquisition strategy adds risk....
Aceto Corp., $18.59, symbol ACET on Nasdaq (Shares outstanding: 28.4 million; Market cap: $519.1 million; www.aceto.com), distributes over 1,100 chemical compounds that manufacturers use as raw materials. It gets two-thirds of these materials from Asia. Aceto’s compounds include ingredients for generic drugs, vitamins and nutritional supplements. In addition, the company sells specialty chemicals that are used to make plastics, adhesives, coatings, food, cosmetics, electronics and air conditioning systems. For the agricultural industry, Aceto makes herbicides, fungicides, insecticides and a chemical that keeps potatoes from sprouting....
Dynacor Gold Mines, $1.90, symbol DNG on Toronto (Shares outstanding: 36.3 million; Market cap: $69.1 million; www.dynacorgold.com), owns five exploration properties in Peru. The company is focused on its Tumipampa property, where exploration drilling has revealed gold and copper mineralization, including in an area where Spanish settlers mined five high-grade gold-silver veins in colonial times. Dynacor is using cash flow from its 100%-owned Huanca gold and silver milling plant to finance its exploration activities....